Going home-hunting is all fun and games until you find your perfect fit and start with the paperwork. This is the part where you question the education system for teaching you trigonometry instead of how-to-adult. The overwhelming majority of people put off looking at paperwork because they don’t know how to go about it. What do you check first? Taxes? Ownership? Sale deed? Well, that’s where due diligence comes into play. A systematic and organized way for you to assess any financial decision including real estate investments.
In simple terms, due diligence is everything you as a buyer should be looking into with regards to the property. This includes ownership, tax payment, sale deed, occupation certificate, possession letter, land records, and more.
Often there are loopholes within the paperwork that you don’t recognise at first glance but come back to bite you after you have settled in. To avoid this, you need to do your homework and make sure that there are no risks.
● Research before finalising: After finding a property, before you finalise it, talk to the residents around to not just ask about property value, but also to know what kind of neighbourhood you are moving into. Know about frequent power cuts, water availability, crime rates, and more.
● Ownership: Check if the property has a sole owner or more, in which case, make sure they have an NOC, Power of Attorney, or other documents that prove that the sale can be done with just the one person.
● Home inspection: It is best to get a professional to inspect every nook and corner of the house. If there are any repairs to be made, talk to the owner about the repairs and get them mentioned in the agreement. Get an occupancy certificate and cross-check the size of the property by getting it surveyed. You can also ask for the master-plan to check for inconsistencies.
● Read any disclosure: Disclosures mentioned by homeowners in the builder-buyer agreement apply to you post-buying. For instance, if you have plans on building something on the property, you need to get a permit for it. Address all possible plans you have to the owner.
● Check important documents: There are certain documents and certificates that are bound to be neglected but might prove to be of importance in the future. These are:
● Status of tax payments: Know that if the previous owner hasn’t been up to date about the tax payments, it will fall on you after the property is handed over in your name. Hence, verify such receipts.
To be on the safer side, consider talking to a property lawyer to make sure you haven’t missed out on any details. They also would be able to help you understand the other technical aspects of home buying. Although it seems like a tedious task, it is all worth it as you can be at peace knowing you have done your due diligence thoroughly.